The acceleration of digital, fierce competition, and ever-increasing customer expectations have all put a major dent in many of our growth plans. Customers want to be treated like individuals and want to stick with companies that know who they are and invest in building a meaningful relationship based on their preferences, values, and needs. To complicate matters, the National Retail Federation reports 60% of consumers want true omnichannel experiences.
Data is at the heart of creating hyper-personalized experiences (dialogue, offers, digital experiences, etc.), ensuring these experiences resonate with customers and are consistent across all channels. According to research, nearly 86% of customers are willing to spend more for a better customer experience. 64% of customers expect tailored engagements based on past interactions. Nearly 91% of customers will shop with brands that provide personalized, relevant offers. When your customers are engaged throughout their purchase journey, you successfully collect valuable customer data you can turn into insights and use to build loyalty. These customer insights can be used to contextualize offers and marketing campaigns.
Personalization drives loyalty–why are businesses struggling to deliver?
Today’s customers want personalized customer service, attention from a brand, and great customer experience. Personalized customer experiences enable you to drive differentiation and gain a sustainable competitive advantage while also driving up both customer loyalty and revenue. In the best personalized experiences, businesses make the customers part of the dialogue and leverage data to create one-on-one experiences. When you present customers with too many options, it makes their shopping decisions harder, which is why insights are crucial to understand the buying history of customers and simplify purchase decisions for them. Data helps you understand your customers better and offer hyper-targeted experiences and products aligned to their needs. The core reason why personalization leads to customer loyalty is it builds upon the prime emotions of establishing powerful customer-brand relationships.
In spite of the fact that personalization is crucial, most businesses are struggling to scale their personalization efforts. This happens because they lack a unified view of the customer and dynamic content modified based on historical data, lingering data silos, mismanagement of the customer journey and, most importantly, failure to invest in cross-functional teams to collaboratively work through enhancements. Since data is the key element needed for personalization, it’s essential to prioritize audits and the creation of a comprehensive customer view. This includes ongoing assessments and scans to make improvements, data integration, and a solid customer experience strategy designed to elevate every customer interaction while enabling personalization that builds lasting customer bonds and increases revenue.
What does it take to deliver personalized experiences?
Successful brands understand the value of quality data and leverage it to their advantage while delivering personalized experiences. This can be conceptualized as a three-step process:
Collection of a range of data is a crucial step. Good quality data that’s often used for creating personalized experiences includes:
Customer shopping preferences have evolved over time and so have personalization strategies. Initiating a two-way communication with your customers is key. Customers are more likely to shop with your brand if they know their feedback has been acknowledged, heard, and ideally acted on. A great way to do this is to personalize calls to action. Rather than sending an email asking them to complete a purchase, send a personalized message, such as, “Not sure what size to buy? Talk to one of our experts to get the best recommendation”.
Reward customers for writing product reviews. Provide additional perks and benefits for uploading images. Drive first-time customers to product reviews that may help motivate them to buy or simply thank them for their purchase.
Collected data serves as the foundation for data-led strategies, helping you create more effective marketing plans that drive better results. In-depth data analysis helps you better understand customer behavior and preferences. Providing a consistent 360-degree omnichannel experience is vital today. When customers switch between digital and retail experiences, it’s important to identify the customer and make suggestions based on their last purchase–regardless of where it was made. Data-led strategies use the data to identify, understand, and predict customer behavior and preferences versus confirming them after the fact.
The ultimate goal for every brand is to build lasting relationships with their customers. Data-led strategies enable you to create relevant interactions across the entire customer journey, and add unique value, both of which build emotional customer bonds. Delivering value–whether it’s incentives, free shipping, exclusive benefits, early access to new products, or helpful tips–leads to an increase in customer lifetime value and customer retention.
Successful brands provide opportunities for micro-experiences that range from simple recognition (thank you for your purchase), surveys, and giveaways to product quizzes and contests. These benefit both your brand and your customers. Customers are awarded loyalty points for participation and you collect additional data about your customers, enabling you to personalize their experiences even more and add more value.
Panera Bread, a quick-service restaurant in the U.S., launched their MyPanera+ Coffee paid subscription component of its loyalty program. By paying a monthly subscription fee, members receive unlimited coffee of any flavor or size once every two hours, including unlimited refills, while sitting in the cafe. According to Forrester, Panera Bread has seen 800,000 enrollments. Of the 500,000 paid subscribers as of October 2020, 35% were new customers. The program boosted guest frequency by more than 200%, food attachment to coffee orders (incremental purchases) rose by 70%. Customers who, on average, visited 4 times a month increased to 10 times per month.
According to Forrester Analytics Consumer Technographics® Benchmark Survey, 52% say getting special treatment from a loyalty program is important to them. Customers seek more attention from companies and building a strong emotional bond should be the prime focus. This can often lead to word-of-mouth marketing referrals that can drive customer acquisition as well as improve brand awareness.
An effective loyalty strategy is the answer to delivering data-led engagement.
According to Forrester research, nearly 48% of companies are data-driven, meaning they make decisions first, then try to find data to back up those decisions. Only 11% of companies use data to drive decisions. Companies like Amazon, Sephora, Marriott, and Netflix heavily rely on data to deliver personalized customer experiences. An omnichannel personalized loyalty program strategy is vital to inform customer interactions across all touchpoints while incentivizing customers to take actions in exchange for perks or benefits.
Companies that invest in an effective loyalty strategy can expect improved performance and results. Traditionally, loyalty programs have been ‘earn and burn’ models’ that focused on customers earning and redeeming points for purchases. Today, predictive data and analytics allow far more targeted marketing and enable rewarding customers in new ways for a wide range of non-transactional activities and behaviors. This elevates member engagement and connectedness while maximizing loyalty and business value.
The right approach to handling data to build hyper-personalized experiences
Data-led personalization plays a crucial role in the customer lifecycle. Understanding your customers’ unique needs and being able to respond to them in real time across their entire journey with your brand is perhaps the key strategy to standing out from the crowd and driving lasting growth.
For more than 10 years, Annex Cloud has been the worldwide leader in technology and service solutions that transform customer loyalty experiences for organizations, extending valued customer engagement, and collecting valuable customer information for enabling data-led strategies. Powered by the comprehensive and scalable Loyalty Experience Platform™, Annex Cloud customers capture and use zero- and first-party data to seamlessly deliver hyper-personalized experiences across the entire customer journey–from awareness to purchase to retention, loyalty, and advocacy. Brands partner with us to take advantage of our robust platform capabilities as well as get industry expert recommendations that help ensure the success of their loyalty programs. The company is recognized by industry respected organizations like Gartner and Forrester and integrates with 100+ market-leading technologies. Get in touch with us today!